Local Government Finance

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 6:14 pm on 8 February 2012.

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Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South 6:14, 8 February 2012

I will try to take your lead and be as gracious and courteous as you are, Mr Speaker.

Once again, I am very disappointed. First, I have to register my interest as an existing and long-serving member of Portsmouth city council. I would have hoped that in the past month or so those Ministers in the Department who have had experience in local government would have been reading and listening to what their former colleagues in local government have been saying to them about the problems with the current settlement and with what is being stored up for the next year or two.

It was not easy for the Tory leader of Surrey county council to say that Surrey would decline to take the gimmick from the Government to keep the council tax down. I am sure that he did it with a heavy heart, but, as he rightly said—this was recounted again here this afternoon—it is better take the pain when it is evenly spread, and when one is at least in control of it, than to accept a short-term gain only to experience a very long-term pain. I think that there is something seriously wrong when a Minister, such as the Minister who opened today’s debate, can give no explanation whatsoever, and can offer no hope to local authorities such as my own which accepted the 2.5% gimmick cut. I tried to persuade my colleagues not to do it, but they chose to take the opposite view.

For us, that will pose a real problem. In my local authority, the shunted costs—the responsibilities that are being pushed down to us—amount to £1.8 million. That is the extra sum that we shall have to find to pay for services for which we never had to budget before. Examples that have been given are the full recovery of the cost of court proceedings, discretionary housing benefit payments, a 50% cut in the community safety grant, section 117 cases, concessionary fares, what is described as

“Concessionary Fares Increase Care of New Back Office System”

—which has been demanded by the Department for Transport—and the youth justice system. That £1.8 million comes on top of a 10% cut.

I was disappointed when Bob Stewart asked whether it would be easier to explain all this in terms of percentages. I do not care how people explain it. It is painful, difficult and awkward for local authorities to do anything, and they have not acted irresponsibly. The days when Ministers were able to cite the irresponsible council are long gone. As was pointed out earlier, no council has avoided making efficiency savings. It is in our interest to make such savings, and we have tried desperately hard to make them.